Cloud Kitchens Become Green Shoots Within Restaurants

Written by Aaron Wise
Wednesday, August 12, 2020 at 09:53pm CDT

Cloud kitchens, also known as ghost kitchens, are virtual restaurant brands that have distinct listings on food delivery apps, yet share a physical kitchen with other “restaurants.”

For example, the in-app DoorDash listing for It’s Just Wings is actually a cloud kitchen menu. Chili’s cooks those wings. The parent company of both brands, Brinker International (NYSE:EAT), disclosed that It’s Just Wings already generates $3m in weekly sales since it launched in June.

Cloud kitchen and ghost kitchen are interchangeable descriptions. Both names have roughly tripled in popularity over the past few years. Google indexes 860,000 results for “cloud kitchen” and 584,000 results for “ghost kitchen.”

Source: Google Trends

California’s large population, and especially its Silicon Valley area, prefer the term “cloud kitchen.” One Californian, Jeff Appelbaum, even gained a Shark Tank appearance for his cloud kitchen called Salted. He failed to secure a deal from the TV panel of investors.

Other companies in the cloud kitchen industry include Horeko, Food Bear, Dietfoodi, Bigspoon, Box8, Tunton, CloudEats, Karma Kitchen, Caterbinge, Zesty Kitchen, Cloud Franchise, Hubfunction, iKcon, Muy, U-Kitchen, Rebel Foods, GrubTech, Kitchens Centre, Kludio, Darth Kitchen, Foodledoodle, Caspers Kitchen Ventures, Stall Hunt, Quaadbotics, Kitchen United, Farm Theory, Kitopi, Rolling Plates, Samosa Party Foods, Ghost Kitchen, Crave Delivery, Dahmakan, ShiftPixy, Butler Hospitality, and Zoku Sushi. Even the bizarre founder of Uber, Travis Kalanick, claims to be working on CloudKitchens.

Several of these companies are attracting substantial investment.

• Box8 raised $14m.
• Muy raised $15m.
• Dahmakan raised $18m.
• Kitchen United raised $40m.
• Rebel Foods raised $50m.
• Panda Selected raised $50m.
• Kitopi raised a $60m Series B round.
• CloudKitchens raised $400m.

As the coronavirus pandemic continues, restaurants must innovate to survive. OpenTable’s new CEO reiterated her forecast that at least one-quarter of restaurants will close this year. As Bloomberg reported today, ghost kitchens “can be a boon for restaurants looking to cut costs, particularly at a time when health concerns and capacity limits put a strain on operations.”

Photo by Sushobhan Badhai on Unsplash